Shawn Fanning's Snocap lays off 60 percent of workforce

It looks like things are not going too good over at Snocap, the company founded by Napster creator Shawn Fanning, as 60 percent of the workforce has been laid off while the company reportedly prepares for a sale.

The company was founded in 2002 to legally sell copy-protected music files on P2P networks by taking care of licensing and copyright issues on behalf of artists. It then evolved to become a backend to online stores, enabling any website to sell music through online shops that can be embedded to HTML pages. In recent years, Snocap and MySpace struck up a relationship for the distribution of licensed music, allowing bands of any size to sell music for whatever price they wanted. Snocap and MySpace would share the small fee that they charged.

With competition such as iTunes dominating the market, Snocap never really took off though. Many believe the company was doomed from the start because of the damage Fanning caused to the music industry with Napster.